Key Takeaways
- Nearly two-thirds (64%) of organisations now use AI, the equivalent of one new business adopting AI every 40 seconds
- 68% of adopters report productivity gains, and 72% expect AI to increase their ability to grow in the coming year
- Half (49%) of organisations cite AI and digital skills shortages as the main challenge for AI adoption, up from 46% in 2025
The adoption of AI is accelerating in the UK, with nearly two-thirds (64%) of organisations now using AI — up from 52% last year and well ahead of the European average of 54%, according to the latest edition of Amazon Web Services’ (AWS) “Unlocking the UK’s AI Potential” report.
The report, conducted by independent consultancy, Strand Partners, and commissioned by AWS, reveals that 68% of adopters report productivity gains, 72% expect AI to increase their ability to grow in the coming year, and 79% say their innovation timelines have accelerated.
But the headline figures mask a more nuanced challenge. While adoption is widespread, transformation through advanced AI is stalling. Currently, most organisations are still using AI for basic purposes — speeding up routine tasks such as summarising documents, or answering simple queries through off-the-shelf chatbots. This is equivalent to owning a smartphone and only using it to make phone calls.
Just 24% of adopters have reached the advanced stage (where AI forms part of core business processes and decision-making), an increase of only one percentage point from last year. The gap between basic and advanced AI adoption matters because the economic value of AI scales dramatically with depth of use. When organisations use AI to redesign workflows, accelerate decision-making, and build entirely new products and services, they report average efficiency gains of 68%, compared with just 40% among basic users.
Closing the gap between basic and advanced AI adoption could unlock an estimated additional £35 billion in economic growth by 2030 for the UK – roughly the equivalent of the economy of the City of Manchester.
The report also shows that innovation cycles are compressing at a remarkable rate. It took a decade to go from dial-up internet to 3G, whereas the leap from generative AI to agentic AI (AI that works as a partner alongside you, planning and carrying out tasks without constant instruction) took only months.
AI growth is spreading beyond London
The research also reveals that the UK’s regional strengths are its real competitive edge. While London leads with a 72% AI adoption rate, acceleration is happening outside the capital in regional hotspots: the North West (28% year-on-year growth), North East (26%), and Wales (25%) are all outpacing London's 16% growth. This means that the UK's AI future won't be won in one city.
Shaped by existing sector strengths, university networks, and industrial clusters, regions are developing their own AI identities. Manufacturing is a standout, where 58% of manufacturing organisations use AI for process optimisation and 74% report productivity gains. As physical AI and edge AI (where AI is built directly into machinery and production lines) mature, these regions stand to benefit earlier and more deeply than almost any other part of the economy.
Healthcare and pharmaceuticals represent one of the UK's largest untapped opportunities. Adoption stands at 69%, and 83% say AI has accelerated innovation, but advanced adoption is growing at only 2% year-on-year. The UK's combination of world-class health data, NHS delivery pathways, and research-led innovation gives the sector a genuine competitive advantage — one that greater AI adoption could translate into faster growth, better outcomes, and stronger global leadership.
The digital skills gap continues to be the single biggest hurdle for UK AI ambitions
Half (49%) of organisations cite AI and digital skills shortages as the main challenge, up from 46% last year. The faster organisations adopt AI, the more acutely they feel the absence of the skills needed to use it effectively.
Only 17% of organisations say they have a strong AI skillset today, yet 84% expect AI skills to be important in the next five years. Organisations are prepared to pay an average 41% salary premium for AI talent. Applied to the UK median full-time salary of £39,000, that premium is worth an additional £16,000 per year.
Despite this, it now takes eight months to fill a digital role, up from five-and-a-half months in a single year. More than half (52%) say they're struggling to hire people with the necessary digital skills, which represents the sharpest increase of any challenge in the study.
Left unaddressed, the skills gap will be the single biggest hurdle for the UK's ability to convert widespread AI adoption into genuine transformation.
When the public sector leads on AI, the whole economy follows
This year's data highlighted the role that government can play in increasing the UK’s AI adoption. More than three-quarters (78%) of organisations say they are more likely to adopt AI if the public sector integrates it into its own systems. Similarly, over a third of startups (35%) cite public sector adoption and innovation-friendly procurement as critical to their ability to scale. The government's own analysis points to over £45 billion per year in unrealised savings from full digitisation.
This is the multiplier effect. When government adopts AI visibly and effectively, not only does it improve public sector efficiency, it also builds public confidence that the technology works and stimulates job creation and growth by creating market demand for AI solutions.
“AI is at a pivotal moment in the UK,“ said Alison Kay, VP and Managing Director of AWS UKI.“Organisations across the country are seeing tangible results from AI, from productivity gains to faster innovation.
"While this progress is encouraging to see, there's still so much more to unlock, especially as we move from basic to advanced AI adoption.
"At AWS, we want to help organisations accelerate digital transformation and provide them with the support they need to succeed, whether that's through providing the technology and infrastructure to build and scale AI, or training, skills and support programmes to ensure no one is left behind.”
The UK has all the right ingredients — now it needs to act
The UK has world-class research, technical talent, a vibrant start-up landscape, and momentum. But momentum alone isn't enough.
The report identifies three priorities for the year ahead:
- Close the digital skills gap at pace by investing in training, public-private partnerships, and AI literacy at every level of education.
- Help organisations move from adoption to transformation through Al strategies and programmes that support this transition, including by making the most of cloud capabilities where they can accelerate progress.
- Scale AI across public services so government leads by example and unlocks billions in potential savings.
AI Minister Kanishka Narayan said: "It's great to see AI adoption rising right across the UK, with more organisations using it to boost productivity, drive growth and unlock new opportunities – just as we're doing in government.
"However, the full potential of this technology will only be realised when businesses and workers have the skills they need to use it effectively.
"That's why we're working with organisations such as Amazon to equip 10 million workers with AI skills by 2030, so more organisations can seize these opportunities and help make the UK a leading AI nation. And our AI Adoption Summit will bring businesses together to focus on how we go further and faster, so more can benefit from this transformative technology."
AWS’s continued investment in the UK
At AWS, we’re committed to creating the conditions for every UK organisation to succeed.
In September 2024, AWS announced plans to invest £8 billion between 2024-2028 building, operating, and maintaining data centres in the UK. This investment is part of the company’s long-term commitment to supporting growth and productivity across the country, and is estimated to contribute £14 billion to GDP and support over 14,000 jobs annually.
Through the AWS Skills to Jobs Tech Alliance, AWS has set out to prepare 100,000 learners in the UK with AI skills by 2030. We have also partnered with the UK government to achieve its goal to train 10 million people in AI skills through programmes such as AWS Educate, AWS Skill Builder, and the Skills to Jobs Tech Alliance, which are free for learners.
Amazon also announced that it is creating more than 1,000 new apprenticeships across the country in 2025 in Amazon businesses including AWS, spanning more than 40 different programmes including cybersecurity, data centre operations, and engineering.
